I've been thinking about buying a house recently (I am in a ultra-fast growing area Nashville, TN) but not sure the risks and frankly annual returns can beat the stock market (specifically S&P $SPY). S&P average annual returns are 8%, it seems unlikely to beat that long term with real-estate.
If you’re buying a house to live in and you plan on living there for awhile, buying a house, especially in a fast growing area should be considered an inflation hedge.
We moved into a three bedroom apartment (1652 square feet) in 2012 and we were paying $1200 a month. When we left in 2016, rent was $1700. Now rent is $1925.
Our mortgage three exits up is less than $2100 for a 3000 square foot house. Besides slight changes in property taxes and insurance, our house payments are not going to increase. This is in the suburbs of Atlanta.
True but if you need to replace the roof tomorrow you suddenly have an unexpected expense of $20K+.
But in general I agree with your point. Buying a place is about stability and control. Especially no one can kick you out as long as you make your payments. I don't think it's a better investment option out there but it's safer for most people than investing in things they don't understand. And if you happen to buy a place in an area that is booming in the next few years then it can really be worth it. But that's the same like buying early a stock of a company that makes it big.
I wouldn’t go that far. If that place is “booming” likely so is all the other places that are similar that you would like to live. Unless you sell and move to a much lower cost of living area, the equity in your house doesn’t help you.
If you go by the popularly accepted rule of thumb, you should put 1% of your house’s value in savings for unexpected home repairs per year. Feels a little high to me.
